Consumer prices rose 3.3% in March, as energy prices spiked due to Iran conflict

Consumer prices spiked in March as the Iran war sent energy costs soaring and took the Federal Reserve further from its inflation target, according to a Bureau of Labor Statistics report Friday. Underlying inflation, however, was relatively tame.

The consumer price index increased a seasonally adjusted 0.9% for the month, putting the annual inflation rate at 3.3%, pushed by a 10.9% surge in energy costs. Both numbers were in line with the Dow Jones consensus.

However, excluding food and energy, core prices rose much less – just 0.2% for the month and 2.6% from a year ago, both 0.1 percentage point below forecast, indicating that underlying inflation was more contained.

The Iran conflict was the story for the monthly inflation reading, as gasoline soared 21.2%, accounting for nearly three-quarters of the headline price increase, according to the BLS.

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